Having been Director of a State Financial Corporation, I have evaluated new
as well as old cases that failed. As per my study and my experience, there
are two major causes of failures - if they are taken care of success rate
will increase manifold:
1. Each Industry has a critical factor - this critical factor may be
location or availability of raw material, labor or manpower in relation to
the location, fast redundancy of technology, distance between the
consumption point and production point, speculative nature of the product
demand , etc. etc. Entrepreneurs fail to take this critical factor into
account to satisfy themselves that they have capability to manage this
critical factor.
2. Shortage of Funds: First and foremost when project report is being made ,
figures of costs and volumes of production and sales and sales prices are
manipulated to arrive at the required DER and DSCR ratios. In order to
create margin on capital assets, prices are inflated , hence margin is
created in the books without bringing actual money. Higher loan and higher
interest component effects the financial viability of the project.
Similarly, a project takes some time to establish the project i.e. 1 to 2
years and standard gestation period of two to three years before reaching
cash break-even stage before being able to generate real profits. In the
same period, funds are drawn for domestic needs also from the factory and
one day entrepreneur finds himself in cash stripped state and everybody
refuses to helpt him at this stage.
Regards
Virendra Goel
-----Original Message-----
From: join_mtc@googlegroups.com [mailto:join_mtc@googlegroups.com] On Behalf
Of Dr.Subrata Chattopadhyay
Sent: Tuesday, August 05, 2014 3:29 PM
To: Prof. Bholanath Dutta
Cc: join_mtc@googlegroups.com
Subject: [MTC Global] Do you believe the modified version of Pareto's
principle holds?
Dear Prof. Datta,
With your kind
permission just thought to think aloud with the group. Would be grateful if
the learned members throw some light upon it.:
99 % of the entrepreneurial journeys are failures; 1% succeeds ........it
needs to be scaled up to 20% for gaining industry balance....So that 80% of
the people can work in 20% of the ventures....a modified version of Pareto's
principle that I thought of
--
Warm Regards,
Dr. Subrata Chattopadhyay
M.Sc Physics(C.U),PGDCA,MBA,PhD- Management Studies (ISM,Dhanbad),Certified
Management Teacher-MTC Global
Associate Professor & Head-Corporate Relations, Future Institute Of
Engineering and Management,Team Future, www.teamfuture.in
Mob: 09836107275/09830632572
Dir:033-24348230
Fax:033-24345641
--
MTC GLOBAL- Educate, Empower, Elevate
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RE: [MTC Global] Do you believe the modified version of Pareto's principle holds?
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